News and Press Releases

LANSING LANDSCAPERS CONVICTED IN LABOR FRAUD SCHEME

FOR IMMEDIATE RELEASE
October 30, 2012
Business owner and his mother forced laborers to work for free
while collecting unemployment insurance.

           GRAND RAPIDS, MICHIGAN – Kevin Romando Johnson, 39, and Sara Johnson, 69, both of Lansing, have been convicted by a jury of mail fraud in connection with a scheme to defraud the unemployment insurance system, U.S. Attorney Patrick Miles announced today. Kevin Johnson was also convicted of a separate count of making a false statement to a federal agent.

           The evidence presented during a six-day trial in Grand Rapids established that Kevin and Sara Johnson owned and operated Lansing Total Lawn Care, a commercial landscaping company. At the end of each mowing season between 2006 and 2010, the defendants laid-off their laborers and coerced them into applying for unemployment insurance benefits. The defendants would then force the workers to toil for the company throughout the winter, driving snowplow trucks and performing other labor. The defendants did not pay the workers for this work, and informed them that unemployment “was their paycheck.” Numerous workers testified that if they refused, Sara Johnson would call the Michigan Unemployment Insurance Agency (“UIA”) and report them as “refusing to work,” leading to the termination of their unemployment benefits. Workers further testified that Kevin and Sara Johnson demanded and received cash kickbacks from the workers’ unemployment checks.

           The evidence at trial further established that Kevin Johnson applied for unemployment benefits for himself while running the company. A UIA official testified that Kevin Johnson personally appeared at the agency in a laborer’s T-shirt, pretending to be a laid-off mower. The official further testified that Sara Johnson called several times a week to “report” on resisting workers, but concealed the fact that the “boss” was her son. Mr. Johnson lied on at least 54 certifications that he was “not self-employed,” and had been “laid off.” Documents and testimony established that Johnson used his unemployment checks to make payments on a Chrysler 300 Limited luxury sedan and fuel his fleet of landscaping trucks. While supposedly “laid off”, Mr. Johnson purchased a time-share at a Las Vegas resort, and routinely used the company payroll account to make mortgage payments and take out cash for himself and his mother.

           In a sworn statement to a federal agent, Kevin Johnson stated he had never knowingly allowed anyone to work for him while collecting unemployment. At trial, the government played a voice mail Johnson had previously left an employee, in which he stated, “I’ll pay you under the table so you can keep your unemployment going.”

           After six days of testimony, the jury reached its verdict after an afternoon and morning of deliberations. “By defrauding the unemployment insurance program, these defendants undercut an important part of our social safety net and harmed workers, employers, and those trying to get back to work,” said U.S. Attorney Miles. “Cheating the government is stealing from everyone. Do it, and expect to get caught, prosecuted, and convicted.”

           Mail fraud carries a maximum penalty of 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss attributable to the scheme. Evidence at trial established the loss in this case was in excess of $315,000. Lying to a federal agent carries a maximum penalty of 5 years’ imprisonment and a $250,000 fine.

           The case was investigated by the U.S. Department of Labor, Office of the Inspector General, and the Michigan Unemployment Insurance Agency. Assistant U.S. Attorneys Nils R. Kessler and Carolyn Almassian tried the case..

END

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